CMS requirements present challenges, opportunities for case managers

IPPS expands quality reporting, hospital-acquired condition list

The Centers for Medicare & Medicaid Services (CMS) continues to move at a rapid pace toward value-based purchasing, proposing expansion in hospital quality reporting requirements and increasing the number of hospital-acquired conditions for which Medicare won't reimburse.

In issuing its final rule for fiscal year 2009 for the inpatient prospective payment system (IPPS), CMS added three hospital-acquired conditions to the list of eight it determined last year could be prevented through proper care and added 13 quality measures to the 30 measures on which hospitals must submit data in order to qualify for full reimbursement.

"We believe that CMS is moving far too quickly and is adding more measures than is required by the law and has not considered the impact of their policy, particularly the unintended consequences," says Leslie Schultz, RN, NEA-BC, PhD, CPHQ, director, knowledge transfer for Premier Inc., an alliance of not-for-profit hospitals and health care systems.

The Deficit Reduction Act of 2005 requires CMS to select at least two complications of care using the following criteria: complications with a high cost, a high volume, or both that are reasonably preventable through use of evidence-based guidelines and that result in a higher payment in the MS-DRG system when they are present as secondary diagnoses.

Initially, CMS pushed for six measures, ultimately identified eight in the final rule for 2008, and left the door open for more. This year, the agency originally proposed adding nine additional conditions and is considering adding up to 10 more in the future.

Is it too much too soon?

"CMS has exceeded what the law required. Their heart is in the right place but from an operations standpoint, it is an administrative burden that could result in the unintended consequences of overutilization," Schultz says.

For instance, some hospitals have asked Schultz if they should perform a urine culture on everybody who comes in, even if they are asymptomatic.

"This will result in unnecessary health care expenses and put an unnecessary burden on the hospital's resources," she adds.

The proposed changes and the direction in which CMS is moving make it more important than ever for hospitals to make sure that documentation is correct and complete, says Lorraine Larrance, BSN, MHSA, CPHQ, CCM, manager with Pershing, Yoakley & Associates, a health care consulting firm with offices in Knoxville, TN; Atlanta; Tampa, FL; and Charlotte, NC.

"I don't see the case managers being totally responsible for capturing the documentation for hospital-acquired conditions or for tracking the quality measures, but as part of a team, they should work collaboratively with other disciplines to assure that the documentation is accurate and the patients get the care they need," she adds.

Where you fit in

Case management directors should make sure everyone in their department is educated on the present on admission documentation and prevention of hospital-acquired conditions, Larrance says.

"The staff have to know how this will impact the organization, but they should also know what the impact is for the patients in terms of quality of care," she says.

The new hospital-acquired conditions for which hospitals will not be paid include surgical-site infections following elective procedures including certain orthopedic surgeries and bariatric surgery for obesity; manifestations of poor control of blood sugar levels; and deep vein thrombosis or pulmonary embolism following total knee replacement and hip replacement procedures.

After Oct. 1, hospitals will not get reimbursed if they don't clearly document that a condition is present on admission.

42 quality measures in FY '09

In addition, CMS added 13 new quality measures to the 30 quality measures on which hospitals must submit data and dropped requirements for reporting on pneumonia oxygenation assessment as of Jan. 1, 2009. This means hospitals will have to report on a total of 42 quality measures in fiscal year 2009 or receive a 2% reduction in payment.

Some of the measures, such as hospital readmission rates, will be available from claims data and the hospital won't have to submit data.

CMS has sent a letter to state Medicaid directors providing information about how states can adopt the same nonpayment policies for hospital-acquired conditions and "never events" and is encouraging the Medicaid programs to revise their state plans to contain the same policies.

New Quality Measures

State, payer participation

According to a CMS press release, nearly 20 states already have or are considering methods to eliminate payment for some preventable medical errors.

Some commercial payers already have announced their intention to follow along with CMS reimbursement policies.

"While it may be some time before we can begin to assess the real impact of these steps on patient care, we are hearing from hospitals around the country about efforts they have undertaken in the past year to improve staff training and other measures to reduce the incidence of these preventable conditions. And other payers, both public and private, are beginning to adopt similar policies in their payment systems. This is a win-win situation: Better outcomes at less overall cost," says Kerry Weems, acting administrator for CMS.

Many health care providers don't completely understand Medicare's hospital-acquired conditions policy and the ramifications on reimbursement, Schultz says.

"In some ways, people are overreacting a little. Hospitals have had to document present on admission conditions since last October and have had a year to prepare for CMS to deny payment for 'never events' and hospital-acquired conditions," she adds.

'Never events' vs. HAIs

For many clinicians, including case managers, a key misunderstanding is the difference between "never events" for which Medicare will pay zero and hospital-acquired conditions, which are preventable complications of care that are not present on admission.

"A practical fact is that the hospital-acquired condition is rarely the only thing going on with the patient. Usually, the patients who develop these conditions have other secondary diagnoses and comorbidities that will place them in a higher-paying MS-DRG anyway," Schultz says.

For instance, if a patient develops a pressure ulcer and that's his or her only complication or comorbidity, it's probably not going to make him or her eligible for a higher-paying MS-DRG, Schultz points out.

On the other hand, if a patient who has congestive heart failure or diabetes as a secondary condition develops a pressure ulcer, those conditions are likely to place the patient in a higher-paying MS-DRG.

"In this case, the hospital is not going to lose reimbursement. It will be paid for a lot of comorbid conditions anyway. Based on what we know about evidence-based care, hospitals should be able to prevent patients from developing Stage 3 or 4 pressure ulcers. Shame on them for providing poor care but they won't be penalized financially," Schultz says.

(For more information, contact: Carol Eyer, senior manager, clinical compliance with Pershing, Yoakley & Associates, e-mail:; Lorraine Larrance, BSN, MHSA, CPHQ, CCM, manager with Pershing, Yoakley & Associates, e-mail:; Leslie Schultz, RN, NEA-BC, PhD, CPHQ, director, knowledge transfer for Premier Inc., e-mail: